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121a

J C Joinery Dorset Limited

Report to Creditors

Pursuant to Section 98 of

the Insolvency Act 1986

Insolvency Act 1986 Appendix A


Estimated Statement Of Affairs as at 19 January 2017

Book Value Notes Estimated to Realise

£ £ £

Assets specifically pledged

Motor Vehicle - Land Rover Defender 110 Lwb 29,356 1 27,440

Less: Land Rover Financial Services 1 20,440-

7,000

Assets not specifically pledged

Rent Deposit 5,003 2 Uncertain

Leasehold Improvements 2,499 3 Uncertain

Plant & Machinery 14,604 4 6,150

Motor Vehicles 1,767 5 2,300

Stock 200 6 100

Office Equipment 1,106 7 50

Cash at Bank 5,105 8 5,105

Debtors 117 9 Nil

13,705

Surplus available to preferential creditors 20,705

Preferential Creditors

Employee Preferential Claims 10 5,530-

Surplus as regards to preferential creditors 15,175

Unsecured Creditors

Trade & Expense Creditors 11 29,881

Highfield Property Co (Northwood) Ltd - Landlord 12 1,822

HM Revenue & Customs - PAYE/VAT 13 21,517

Deposit Creditors 14 3,540

Mr R Maidment - Loan 15 7,035

Ms L Maidment & Mr J Curtis - Loan 16 26,431

Redundancy 17 4,776

Pay in Lieu of Notice 17 5,502

Arrears of Wages (unsecured element) 17 1,817

102,321-

Estimated deficiency as regards non-preferential creditors 87,146-

Issued and called up capital

Ordinary Shareholders 18 100

100-

TOTAL SURPLUS/(DEFICIENCY) 87,246-


A – Notes to the Statement of Affairs

1. In July 2015, the Company entered into a four year Hire Purchase Agreement with Land Rover

Financial Services. This was to purchase a Land Rover Defender 110 Lwb Diesel Xs Utility

Wagon Tdci. As a cash deposit was paid and another vehicle used in part exchange at the ouset,

there is equity within the vehicle which the Liquidators will be looking to realise.

2. The landlords, Highfield Property Co (Northwood) Ltd are holding a rent deposit of £5,003. As

can be seen at 12 below, they have a claim for unpaid rent and may also have claims in respect of

dilapidations. It is therefore uncertain as to whether any of the deposit can be recovered.

3. The Company’s accounts for the year ended 30 April 2016 show leasehold improvements with a

book value of £2,499. The Liquidators’ will determine if there is any realisable value in those

leasehold improvements.

4. A valuation of the Company’s Plant & Machinery (“P&M”) was undertaken by Simon

Woodhams of Asset Recovery and Insolvency Hampshire Limited (“the Agents”) in accordance

with the Royal Institution of Chartered Surveyors valuation procedures. The agents have valued

the P&M at £8,400 on a going concern basis and £6,150 on a forced sale basis.

5. The Company has two unencumbered Motor Vehicles. A valuation of these Vehicles has been

undertaken by the Agents in accordance with the Royal Institution of Chartered Surveyors

valuation procedures. It is expected that the Vehicles will have a combined estimated to realise

value of £2,300.

6. A valuation of the Company’s stock was undertaken by the Agents in accordance with the Royal

Institution of Chartered Surveyors valuation procedures. The stock is made up of a variety of

items including racks, silicone tubes, sanding belts, odd spare window mechanics, air horns and

cans of primer and stain. The Agents expect the stock to have a value of £200 on a going concern

basis and £100 on a forced sale basis.

7. The Company has a small amount of Office Equipment. A valuation has been undertaken by the

agents in accordance with the Royal Institution of Chartered Surveyors valuation procedures. The

Agents have valued the Office Equipment at £100 on a going concern basis and £50 on a forced

sale basis.

8. Cash at Bank relates to funds of £4,200 held in the client account of Peter Hall Limited plus £905

which is with Barclays Bank Plc. The Company has two accounts with the Bank, a current

account which is overdrawn and a savings account. Assuming the Bank apply set-off, a credit

balance of £905 remains.

9. The Company’s records show that there are book debts outstanding totalling £117. These are not

expected to be recoverable due to one being disputed and the work relating to the other one not

being completed.

10. Employees’ preferential claims in respect of holiday pay and arrears of wages have been

calculated at £5,530 based on the information provided in the Company records.

11. Creditors’ claims have been taken from the Company’s records. No steps have been taken to

agree these claims at this time.

12. The Company’s records indicate that the landlords are owed £1,822. The landlords may also have

certain claims in respect of dilapidations which have not been included in the statement of affairs.

13. The Company’s records indicate that the amount due to HM Revenue & Customs (“HMRC”) in

respect of PAYE is £4,879 and VAT £16,638.

14. The Company’s records show that deposits of £3,540 have been received from a small number of

customers where work had not started.

15. Information taken from the Company’s records show that the Company Secretary’s father, Mr

Maidment, made various loans to the Company during the period 26 October 2015 to 30 March

2016 totalling £10,004. Some small monthly repayments were made resulting in the balance

outstanding being £7,035.

16. The Company’s records show that Jamie Curtis and Lucy Maidment are jointly owed £26,431.

17. Employees’ unsecured claims in respect of pay in lieu of notice, redundancy and arrears of wages

have been calculated from information provided in the Company records.

18. The information taken from Companies House shows that the Company has issued 100 ordinary

shares of £1 each.


B - Company Creditors

Key Name Address £

CA00 Axminster Tool Centre Ltd 253.29 Unit 10, Weycroft Avenue, Axminster, Devon, EX13 5PH

CB00 Brimble Lea & Partners 180.00 Wessex House, High Street, Gillingham, Dorset, SP8 4AG

CB01 British Woodworking Federation 41.99 The Building Centre, 26 Store Street, London, WC1E 7BT

CB02 Mr M Bain - *Deposit Creditor* 1,474.09

CC00 Coastal Specialist Ironmongery 1,169.53 Global House, Bojea Industrial Estate, Trethowel, St Austell, Cornwall, PL25 5RJ

CD00 Dentons Directories 138.00 Bridge House, Station Road, Westbury, Wiltshire, BA13 4HR

CD01 Mr C Downton - *Deposit Creditor* 623.49

CE00 Elmbridge Supplies Company UK Ltd 553.18 Unit 20 Spinnaker Road, Hempstead, Gloucester, GL2 5FD

CE01 Emac Ltd 64.08 Emac House, Southmere Court, Crewe Business Park, Crewe, CW1 6GU

CE02 Employee Redundancy Claims 4,776.40

CE03 Employee Pay In Lieu of Notice 5,501.65

CE04 Employee Arrears of Wages (unsecured) 1,816.67

CE05 Employee Arrears of Wages (preferential) 5,530.14

CF00 Ford Fuels 102.97 The Oil Depot, Farrington Fields Trading Estate, Farrington, Bristol, BS39 6UU

CF01 Mr D Fangen - *Deposit Creditor* 248.98

CH00 Highfield Property Co (Northwood) Ltd 1,822.13 Kirkland, Church End, Milton Bryan, Bedfordshire, MK17 9HR

CH01 HM Revenue & Customs - PAYE & VAT 21,516.95 Insolvency Claims Handling Unit, Room BP 3202, Benton Park View, Longbenton,

Newcastle upon Tyne, NE98 1ZZ

CH02 Howden Joinery Ltd 840.45 C/o Begbies Traynor (SY) LLP, Kendal House, 41 Scotland Street, Sheffield, S3 7BS

CL00 Lathams Ltd 6,977.65 Unit 3, Swallow Park, Finway Road, Hemel Hempstead, HP2 7QU

CL01 Local World 814.22 Unit 2 Mercury Place, 11 St George Street, Leicester, LE1 1QG

CL02 Lampard Electrics Ltd 572.82 14 Chestnut Way, Gillingham, Dorset, SP8 4RT

CL03 Landrover Financial Services 20,439.67 St William House, Cardiff, CF10 5BH

CM00 MKL Accountants Limited 1,961.13 Herston Cross House, 230 High Street, Swanage, Dorset, BH19 2PQ

CM01 Mr R Maidment 7,034.52

CM02 Ms L Maidment & Mr J Curtis 26,431.45

CM03 Mr P Messer - *Deposit Creditor* 773.25

CN00 NFU Mutual 947.90 Credit Management & Financial Monitoring, Tiddington Road, Stratford-upon-Avon, CV37

7BJ

CO00 O2 Telefonica UK Ltd 42.79 260 Bath Road, Slough, Berkshire, SL1 4DX

CP00 Mr R A Palmer 450.00

CR00 RV Maidment Ltd 576.00 Unit 1 Western Works, Salisbury Road, Sutton Mandeville, Salisbury, SP3 5NL


B - Company Creditors

Key Name Address £

CR01 Roman Glass Ltd 277.19 8 Old Market Centre, Gillingham, Dorset, SP8 4QQ

CS00 Spiller Architectural Ironmongery Limited 4,579.21 1 Oxford Road, Pen Mill Trading Estate, Yeovil, Somerset, BA21 5HR

CS01 South Somerset District Council 859.00 The Council Offices, Brympton Way, Yeovil, Somerset, BA20 2HT

CS02 Shire Leasing Plc 54.66 1 Calico Business Park, Sandy Way, Amington, Tamworth, Staffordshire, B77 4BF

CS03 Somdor Engineering Ltd 38.40 Gibbs Marsh Trading Estate, Stalbridge, Dorset, DT10 2RY

CS04 Stalbridge Building Supplies Limited 688.58 Station Road Business Park, Station Road, Stalbridge, Dorset, DT10 2RN

CS05 Mr J Semple - *Deposit Creditor* 420.27

CT00 Topline Glass & Glazing Ltd 3,153.26 The Conquest Business Park, Ilton, Ilminster, Somerset, TA19 9EA

CT01 Teknos UK Limited 1,629.92 Unit 1 Heath Farm, Banbury Road, Sweford, Oxon, OX7 4BN

CT02 Timbmet Ltd 1,070.69 Kemp House, Cumnor Hill, Oxford, OX2 9PH

CT03 The Visitor 161.86 Po Box 1, Castle Cary, Somerset, BA7 7BG

CT04 Travis Perkins Plc 154.87 C/o Creditor Services, Freeths LLP, 5 New York Street, Manchester, M1 4JB

CV00 Valley Community News Ltd 432.00 19 Crow Lane, Wilton, Salisbury, SP2 0HB

CW00 Wurth UK Ltd 710.79 1 Centurion Way, Erith, Kent, DA18 4AE

CW01 Wessex Water 321.73 1 Clevedon Walk, Nailsea, Bristol, BS48 1WA

CW02 Worldpay Merchant Service 62.98 Gateshead Card Centre, Victory House, 5th Avenue, Gateshead, NE11 0EL

46 Entries Totalling 128,290.80


C - Shareholders

Key Name Address Pref Ord Other Total

HC00 Mr Jamie Lee Curtis 0 100 0 100

1 Entries Totalling 100

122a


D - Statutory Information

Company Number 07597915

Date of Incorporation 8 April 2011

Nature of Business Bespoke Joinery Services

Issued Share Capital 100 Ordinary £1 Shares

Director Jamie Lee Curtis

Registered Office C/o Peter Hall Limited

2 Venture Road

Science Park

Chilworth

Southampton

SO16 7NP

Trading Address Unit 14A Bennett’s Field Trading Estate

Wincanton

Somerset

BA9 9DT

Accountants MKL Accountants Limited

Chartered Certified Accountants

Herston Cross House

230 High Street

Swanage

Dorset

BH19 2PQ

Bankers Barclays Bank Plc

Yeovil

Somerset

122a

D – Statutory Information (Cont’d)

Prior Professional Relationships

Neither Peter Hall, Katie Young nor any members of their staff have had any prior material

relationship with the Company or its directors within the past 3 years, or are aware of any conflict of

interest that would impair their objectivity as Joint Liquidators of the Company.

Board Meeting

A meeting of the board of directors was held on 3 January 2017. It was resolved that it had been

proved to the satisfaction of the meeting that the Company was insolvent and that a meeting of

members should be convened to place the Company into Creditors’ Voluntary Liquidation.

Notices

The director decided to take steps to place the Company into Creditors’ Voluntary Liquidation on 3

January 2017 and a written resolution of the members and notices to creditors were issued on the

same day.

Written Resolution of Members

The relevant resolutions were passed by the members by way of written resolution on 19 January

2017. A special resolution was passed to place the Company into Creditors’ Voluntary Liquidation

and an ordinary resolution to appoint Peter Hall and Katie Young of Peter Hall Limited, 2 Venture

Road, Science Park, Chilworth, Southampton, SO16 7NP as Joint Liquidators.

Professional Fees

It has been agreed by the director that fees for assisting in the preparation of the statement of affairs

and assisting with placing the Company into liquidation will be £3,500 plus expenses and VAT in

accordance with Peter Hall Limited’s engagement letter dated 9 December 2016.

Peter Hall Limited has received £4,200 from the Company’s bank account which is being held in its

client account to meet the fees detailed above. Therefore, these fees will be paid from the Company’s

assets.

The pre-appointment work undertaken has been necessary to get the Company to a position where it

can enter Creditors’ Voluntary Liquidation and a full detailed report can be presented to members and

creditors.

Initially meetings were held with the Director and Company Secretary to review the Company’s

finances and explore the options available.

When it became clear that the Company was insolvent and needed to enter an insolvency procedure,

Peter Hall Limited were engaged to assist the Director to take the necessary steps to place the

Company into Creditors’ Voluntary Liquidation.

The proposed liquidators attended the trading premises on 3 January 2017 to assist the Director as the

employees were made redundant. A representative of Insol Group Limited, employee specialists, were

engaged to assist the employees to complete their claims for unpaid wages, holiday pay, redundancy

and pay in lieu of notice in readiness for submission to the redundancy payments office.

122a

Simon Woodhams of Asset Recovery and Insolvency Hampshire Limited (“the Agents”) were

instructed to value the Company’s assets and seek to find a buyer for the business. The Company had

a comprehensive customer base.

The proposed liquidators have been assisting the Director and Agents with marketing the business by

circulating the Company’s details to their accountant and solicitor contacts and those businesses that

they are aware work in the joinery industry.

As a result, various telephone calls and e-mails have been received and responded to and the details

passed on to the Agents.

Other pre-appointment work undertaken has included anti money laundering, communicating with

creditors, employees and the Company’s accountants, administration set up, obtaining information

from the Director in relation to the premises, creditors and employees and putting the report together

to be laid before members and creditors.

By carrying out the above work, the proposed liquidators believe that the best possible value will be

obtained for the business as a whole or its assets.

Related Party Transactions

Loan Account – Jamie Curtis & Lucy Maidment

The Company records show that Jamie Curtis & Lucy Maidment are jointly owed £26,431.

Loan – Mr R Maidment

The Company records show that the Company Secretary’s father, Mr Maidment, made various

loans to the Company during the period 26 October 2015 to 30 March 2016 totalling £10,004.

Some small monthly repayments were made resulting in the balance outstanding being

£7,035.

Landlord

The landlords are Highfield Property Company (Northwood) Limited who have a claim for unpaid

rent. The landlords may also have certain claims in respect of dilapidations which have not been

included in the statement of affairs.

J C Joinery Dorset Limited (“the Company”)

E – Company History

Company Background

Jamie Curtis started J C Joinery and Carpentry in 2003 with a van, some tools and the determination

to make it a success. As his reputation grew he turned his double garage into a workshop. It was not

long before orders started to increase and space became an issue. It was also clear that an employee

was required to assist with the increase in trade. Once the first joiner was employed, the business

moved to rented premises at Unit 3 Filleybrook Business Park, Buckhorn Weston. The business was

incorporated on 8 April 2011 in the name of J C Joinery Dorset Limited. The Company remained at

Filleybrook Business Park for five years. In this time, it expanded into the adjacent two units and

offices and in the last twelve months moved to its current trading location at Unit 14a Bennetts Field

Trading Estate, Wincanton.

Development and Expansion prior to financial distress

The Company had always been successful in winning quality work, completing projects for Pythouse

Gardens, Pythouse Club House, Kings Arms, Moyle’s Court School, Duchy Estate, The Udder Farm

Shop and many other joinery projects for larger houses in and around Dorset and Somerset. The

Company’s annual turnover increased from £80,000 to £500,000 during the last five years with a

steady profit of 17-19%. At its height, the Company’s staff levels peaked at fourteen including sub-

contractors whilst recently operating with a total of ten including two sub-contractors. The Company

has always managed to purchase its assets using cash with the exception of one vehicle which is on

finance.

Onset of financial distress

The Company started to experience some challenges which are believed to have led to the current

situation.

1. Space and electricity constraints meant that orders were being lost, due to time scales being

too long. This was mostly because the single-phase equipment was not powerful enough to

produce joinery at the same speed as competitors.

2. The Company started using a new timber called Red Grandis, in which they experienced large

problems with the joinery moving, and therefore costs occurred in sending back members of

staff to repair and replace items. In some cases, the final invoices had to be written off as

customers were not happy with their finished products. The Company stopped using this

material.

3. The Company experienced two large staffing issues, one where a joiner cut the top of his

fingers off. Despite a clean bill of health by Health and Safety the costs to the Company

included;

- Full pay whilst on sick.

- Dismissal costs.

- Increased Public Liability insurance while the case is being fought as the ex-employee is

trying to claim against the Company.

- Down time in production.

4. Another employee cost the Company large sums of money due to bullying, which led to two

members of staff leaving and loss of final invoices due to poor quality of work. The costs to

the Company included;

- Full pay while on suspension (pending investigation with view to dismissal).

- External and internal HR advice and reports for the investigation.

- The investigation lasted 3 months.

- Again, loss of final invoices due to customers being unhappy with the quality of the work,

and costs for sending staff back for snagging and repair work.

- Loss of production until replacement member of staff was found.

Despite the above challenges, Jamie still had the determination to make J C Joinery Dorset Limited a

success. Jamie researched moving to Wincanton and as a result the Company relocated.

This site enabled the Company to take on larger orders as it meant the internal lay out of the workshop

could be set up to maximise production. The improvements were:

- Upgrade of some single-phase machines to three phase.

- Purpose built spray shop.

- Office/show room.

- Improved site access (A303)

- Improved work flow

- Improved staff working conditions.

The move to Wincanton showed positive signs. It then showed that the larger orders were taking up

more time in production and therefore the Site Carpenters had large amounts of down time, which

were previously taken up snagging and getting orders out on time. These problems had started to

affect cash flow and therefore the decision was made to make the Site Carpenters and the Operations

Manager redundant. Jamie would take on the work of the Operations Manager and Site Carpenters

would be hired as and when required under the CIS scheme. This would ease cash flow and the

Company would remain competitive within the marketplace by reducing unnecessary overheads. The

larger creditors had previously been spoken to and weekly payment plans agreed. Jamie had always

tried to keep them notified of any changes and chose to share with them the reasons behind the

financial restraints. Jamie had also negotiated purchase costs with the suppliers. The Company had

not given the usual annual pay rises to its staff. Attempts were made to increase sale prices where

possible. Jamie injected £36,000 into the Company to cover the move costs and ease the cash flow.

Cash was still tight. The project analysis on orders showed all jobs to be making a good margin, but

had no room for any errors or any unnecessary costs.

From work booked in, and the calculations made, the signs of trading out of this situation were

positive albeit slow. The redundancies caused unsettlement between the remaining staff which took a

little while to settle and caused a member of staff to leave. Jamie and Lucy (Company Secretary)

carried on monitoring the financial situation on a week by week basis. The cash flow forecast was

tight, but met the financial commitments using the full extent of the Company’s £20,000 overdraft.

Directors’ Explanation as to the causes behind the company’s failure

Whilst on holiday Lucy and I realised that I had lost my enthusiasm and determination for The

Company. I felt that I had done as much as I could to try and make the Company more profitable and

trade out of the current situation. Lucy had been helping me for the last 18 months run the accounts

side of the Company without pay. Lucy had done this in between doing her own job and both of us

felt that we were stretching ourselves too far and it was beginning to affect our health. We had

discussed at length what we could do to ease the pressure. It seemed that the only way forward was

for the Company to receive a substantial cash injection. The Company’s financial position was

reviewed again. But while doing this we had a customer who was unhappy with the order and would

not accept it and therefore a refund had to be made. This resulted in us being unable to meet

November payments and the future forecast to the end of February 2017 showed the situation getting

worse.

This was the final straw, I could see no way forward. I had faced the problems I had experienced over

the last five years and fought through them, but now I didn’t want to fight it anymore. The refund to

customer and the loss of time meant that I was not going to be able to pay all the outstanding bills,

despite trying to re arrange payment plans with suppliers. I just did not have the determination to

continue.

Lucy and I discussed what we should do and felt that there were two clear options, to sell or to

liquidate. I spoke to Butler and Turner, a large agent for selling businesses. They were impressed

with the business and thought it would sell and recognised that a cash injection was required. I then

met and discussed the Company’s financial position in detail with Peter Hall and Katie Young of

Peter Hall Limited. It was apparent that the Company was insolvent.

My main concern was to not carry on and get deeper in debt, which is what the cash flow forecast was

showing. Time was not on my side so I had to dismiss the sale option and proceed with liquidation.

As a result of the above, Peter Hall and Katie Young of Peter Hall Limited were engaged to assist the

director, to take the necessary steps to place the Company into Creditors’ Voluntary Liquidation.

Trading ceased on 3 January 2017 with all employees being made redundant.

Why the business failed

The Company has a very good reputation for the manufacture of bespoke joinery that is finished and

installed to the highest quality. The Company has been trading for 13 years and has a strong team of

highly skilled staff. The failing of the Company is one that has accrued over the past 5 years. Since

the beginning, I have always succeeded to improve processes to make a better product and offer great

service. These improvements were expensive and through the transition unexpected surprises arose.

The estimated cost damage over the last five years is around £81,000. This is made up of:

- £10,000 of bad debtors.

- £26,000 work place accident, which is ongoing.

- £40,000 dismissal of the member of staff for poor work quality and bullying.

- £5,000 recent refund for work carried out.

The above list is not exhaustive.

It is my understanding that the Company has grown too quickly.

Jamie Curtis

127a


F - Estimated Deficiency Account

For the period from 1 May 2016 to 19 January 2017

£

Profit and Loss Account Balance at 1 May 2016 864

Additions

Motor Vehicles (not specifically pledged) 533

533

Amounts written off for the purposes of

the statement

1,397

Rent Deposit 5,003

Leasehold Improvements 2,499

Plant & Machinery 8,454

Stock 100

Office Equipment 1,056

Debtors 117

Motor Vehicle - Land Rover Defender 110 Lwb 1,916

____________

(19,145)

(17,748)

Extraordinary Items

Redundancy

Pay in Lieu of Notice

4,776

5,502

(10,278)

(28,026)

ESTIMATED TRADING LOSS FOR THE PERIOD

(59,220)

DEFICIENCY PER STATEMENT OF AFFAIRS

(87,246)

126a

Note: There is a slight difference between the share capital stated in the balance sheet in the financial

accounts where it is shown as one and the annual return where it is shown as 100.


G –Extracts from Unaudited Accounts

Period Ended 30 Apr 2016 30 Apr 2015 30 Apr 2014

£

£

£

Profit & Loss

Turnover 490,923 413,149 302,334

Directors Remuneration &

other benefits

8,064 7,965 8,415

Taxation 5,462 2,004 4,027

Retained Profit (Loss) 2,343 8,015 1,529

Dividends 10,000 5,000 -

Profit (Loss) to reserves (7,657) 3,015 1,529

Profit (Loss) b/f 8,521 5,506 3,977

Profit (Loss) c/f 864 8,521 5,506

Balance Sheet

Fixed Assets 49,332 19,526 15,454

Current Assets 54,578 58,243 21,296

103,910 77,769 36,750

Current Liabilities

(72,764) (61,467) (22,366)

Long Term Liabilities

Provisions for Liabilities

(20,915)

(9,366)

(3,875)

(3,905)

(5,786)

(3,091)

(103,045) (69,247) (31,243)

Net Assets 865 8,522 5,507

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